Editorial: Economists agree things are looking up for B.C.'s economy

Vancouver Sun editorial01.17.2014

One economist attending this week's Board of Trade summit, HSBC Canada economist David Watt, was particularly bullish: 'Thinking short-term and long-term, I’ve got more confidence about the economic outlook for B.C. than Alberta.'

Business leaders delivered a welcome message this week — betting on improved economic conditions for the coming year as Canada’s dollar declines and demand for B.C. exports grows.

Both the Business Council of B.C. and a Board of Trade Economic Outlook Summit are predicting provincial growth to climb to 2.4 per cent, up from 1.5 per cent in 2013. Improved growth is expected to lower B.C.’s jobless rate which stands at 6.6 per cent, the highest of any western province. The province lost nearly 19,000 jobs on a net basis last year.

There are several substantive reasons for the prevailing optimism, mainly related to export growth.

This is a year when B.C. is expected to turn from relying heavily on consumer spending and residential construction to exports and business investment. The theory is, the housing market has softened and heavily indebted consumers are largely tapped out. And so, all eyes are going to be on international trade.

The economies of both the U.S. and Europe countries are rebounding, making them better customers for B.C. products and resources.

China also is faring reasonably well. As Premier Christy Clark noted this week, B.C.’s softwood lumber exports were up 13 per cent in 2013, over the previous year.

And a lower Canadian dollar, with most analysts predicting a currency at 90 cents US by the end of the year, will help further boost B.C. exports.

A lower dollar is also expected to enhance the tourism industry, so important to this province, as well as film and television production.

Then, there’s the prospect of a liquefied natural gas industry in B.C.

While LNG exports likely are still five or six years away, engineering work, road construction and the building of other supportive infrastructure could begin as early as this year.

One economist attending the Board of Trade summit, HSBC Canada economist David Watt, was particularly bullish: “Thinking short-term and long-term, I’ve got more confidence about the economic outlook for B.C. than Alberta.”

Of course B.C. may experience some bumps in the road on the way toward better economic health.

Two major oil pipeline projects that could bring thousands of jobs in coming years are facing opposition from both environmentalists and aboriginal groups.

And aboriginal legal action is threatening several other resource development projects in the province: the Site C Dam, the New Prosperity copper and gold mine, and the Jumbo Glacier ski resort.

The business community’s projections this week are entirely in line with other recent forecasts.

The province’s 13-member Economic Forecast Council last month predicted B.C.’s growth would come in at 2.3 per cent in 2014.

Also in December, the Royal Bank’s senior economist Robert Hogue reported the province’s GDP would grow by “a respectable 2.4 per cent in 2014.

“We anticipate that rising external trade and the green light on major investment projects will boost confidence in the province in 2014.”

The worst, it would appear, is behind us. Some economists see 2014 as a transitional year, moving B.C. from the relatively mediocre performance of the past several years, to a brighter and more prosperous 2015. All of this is good news for job seekers, investors, businesses and especially the Liberal government that has, rightly or wrongly, been blamed for the province’s poor showing to date.

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Editorial: Economists agree things are looking up for B.C.'s economy

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